Ask Question
BusinessBusiness
25 May, 13:52

Which one of the following represents the minimum rate of return a firm must earn on its assets if it is to maintain the current value of its securities?

A. Pretax cost of debt

B. Weighted average cost of capital

C. Cost of equity

D. Aftertax cost of debt

+2
Answers (1)
  1. 25 May, 14:08
    0
    B. Weighted average cost of capital

    Explanation:

    The Weighted average cost of capital is abbreviated as the WACC. It is the weighted average of cost of common equity, cost of preferred equity and aftertax cost of debt. For a company to have a breakeven in returns, they need to earn a minimum rate of return on its assets which is equivalent to the weighted average cost of capital (WACC) making choice B correct.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Which one of the following represents the minimum rate of return a firm must earn on its assets if it is to maintain the current value of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
The particular type of competition dramatically influences the range of price competition and, in turn,
Answers (1)
Identify which of the following statements is true. A) Section 336 prevents recognition of a loss when making a pro rata distribution of property toa related person.
Answers (1)
Damon convinced his aunt to lend him $2,000 to purchase a plasma digital TV. She has agreed to charge only 6 percent simple interest, and he has agreed to repay the loan at the end of one year. How much interest will he pay for the year?
Answers (1)
Costume jewelry is produced in a monopolistically competitive market. A profit-maximizing producer finds that marginal revenue = marginal cost = $4.50 when output is 700 rings. An economist studying this information can conclude that:a.
Answers (1)
For a pepperidge farm production facility, managers and employees would be
Answers (1)
New Questions in Business
Implicit transaction
Answers (1)
A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor at $8 each or to produce them in-house.
Answers (2)
A stock's holding period return represents: a. the return from a stock relative to the return from a specific portfolio. b. the total return earned over a specific period through buying and selling an asset. c.
Answers (1)
Evaluate the current China/Taiwan logistics costs. Assume a current total volume of 190,000 CBM and that 89 percent is shipped direct from the supplier plants in containers.
Answers (1)
Given the pork supply function Q = 178 + 40p - 60p_h. how does the supply function, Q = 88 + 40p. change if the price of hogs increases from $1.50 to $1.90 per kg? If the price of hogs increases to $1.90 per kg, then the supply function will be Q =
Answers (1)
Home » Business » Which one of the following represents the minimum rate of return a firm must earn on its assets if it is to maintain the current value of its securities? A. Pretax cost of debt B. Weighted average cost of capital C. Cost of equity D.
Sign Up Forgot Password?